Being buried in debt can be a very stressful time that some may not be able to recover from. If a person finds themselves in a situation where the debt they have accumulated is financially insurmountable, they can be in even more trouble with creditors. However, declaring bankruptcy offers debtors the opportunity to get out of the financial hole they were previously stuck in. There are different types of bankruptcy that can offer someone much-needed debt relief. The two most common forms of bankruptcy used to discharge debt are liquidation (Chapter 7) and reorganization (Chapter 13).
Although, declaring either Chapter 7 or Chapter 13 bankruptcy does not wipe away all forms of debt. Based on the type of debt, it may not be eligible for discharge regardless of what kind of bankruptcy is declared. If you recently have been struggling with debt and are curious if declaring bankruptcy as a viable option, please contact a Newburgh bankruptcy lawyer at the Law Office of Michael D. Pinsky, P.C. for more information.
What kind of debt can not be discharged with bankruptcy in Newburgh, NY?
The type of bankruptcy you are capable of declaring depends on your financial circumstances. For example, in a Chapter 7 bankruptcy, many of the creditor’s assets are sold off in order to cover some portion of the debt owed. While some essential assets can not be liquidated, whatever debt remains will usually be discharged after four months from filing for bankruptcy. Chapter 13 bankruptcy allows the debtor to pay back an agreed-upon amount of their debts within three to five years. This allows debtors to hold on to some of their assets, as long as they are able to maintain their payments. Any remaining debt by the end of the period will typically be discharged. Because of how they are designed, Chapter 7 is normally preferred by people who possess fewer resources to pay back their debts.
However, regardless of which option for bankruptcy is used, there are specific types of debt that may be exempt from being discharged. This can include child support, debt from a personal injury lawsuit, certain types of taxes, and debts that were not listed in the bankruptcy filing.